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BPI Foundation-Ateneo: Building Capacities of MFIs

The Ateneo de Manila University is the premier private university in the Philippines. It seeks to form persons who, following the teachings and example of Christ, will devote their lives to the service of their fellowmen and, through the promotion of justice, serve especially those who are most in need of help: the poor and the powerless. The Development Studies Program seeks to form competent development professionals who are able to analyze changing social conditions, and effectively contribute to the continuing effort to improve Philippine society.

The Bank of the Philippine Islands leads in consumer banking, trust banking and asset management, corporate banking/corporate finance and bancassurance. It boasts of having the largest combined network of branches/kiosk units and ATMs, servicing some 3 million depositors. For years, international publications and rating agencies have given annual awards to BPI as one of the best banks in the region. BPI has been consistently cited for its above-average profitability, sufficient capital/assets, low-cost funding base, and manageable nonperforming loan levels.

In August 2006, the Ateneo de Manila University signed a Memorandum of Agreement with the Bank of the Philippine Islands Foundation, Inc. The partnership aims to reach out to microfinance institutions that face greater need to finance capacity building of their management staff; expand branch networks; and the development of effective information system. Ateneo takes the role of building capacity of the MFI while the BPI Foundation offers capacity building loans of up to PhP2 million to MFIs. The partnership also paved the way to reach out to more MFIs through the conduct of Ateneo microfinance training courses in Metro Manila, Davao, Cagayan de Oro, Iloilo, Zamboanga, Naga and Cebu.

Since the inception of the partnership, the trainings held in key cities of the Philippines were able to reach out to 88 microfinance institutions attended by 217 participants. An average of 20 participants attended the trainings. With the capacity building program, Ateneo was able to facilitate three microfinance institutions to access the BPI Capacity Building Loan. These are Lifebank Foundation, Inc. and Progressive Bank both based in Iloilo; and the Agriculture and Rural Development for Catanduanes based in Catanduanes.

Microfinance industry players favorably received the Ateneo-BPI trainings. They expressed that the strategy adapted in bringing the training programs near their headquarters significantly reduced their training costs and caused minimal disturbance in regular operations due to reduced travel time. Participants coming from other places requested that these training events should also be conducted in key cities nearer them. To address this demand, the following are the cities where training will be held for 2008: Cebu, Vigan, Tuguegarao, Manila, Tacloban, Iloilo, Cagayan de Oro and Davao.

Loan Purpose
Any of the following: (1) Training of MFI personnel for strengthening of organization’s operations; or (2) Development or enhancement of management information systems

Loan Amount
This may be availed up to PhP1.0 million representing 70% of program costs. Loan releases will be based on capability building program schedule. If there are several loan releases (draw downs), the aggregate exposure for each loan purpose is PhP1.0 million.

Interest Rate
4% per annum for the entire term payable monthly

Loan Term
1-2 years monthly amortization of interest, and monthly or quarterly amortization of principal with six months grace period

Other Requirements
An MFI must be registered with the Securities and Exchange Commission, operating for the past three years with no adverse borrowing record. It should have a functioning board of directors or credit committee and management staff. Three years audited financial statements and three years income tax return are required to be submitted. For Non-Government Organizations, accreditation by the Philippine Council for NGO Certification is preferred.